Wynn’s Blames Restructuring Costs for ’91 Loss

Citing weak U.S. auto sales and the costs of a restructuring program, Wynn’s International on Thursday reported a net loss of $11.2 million, or $3.09 per share, for 1991.

The company, a major manufacturer and wholesaler of automotive chemicals and air conditioners and builders’ hardware, blamed the loss on a onetime charge of $14.9 million for the fourth quarter to cover the costs of reorganizing its ailing air-conditioner unit.

For 1990, Wynn’s posted net income of $6.3 million, or $1.65 per share.

James Carroll, president and chief executive, said the company would have posted a profit of $3.7 million except for the fourth-quarter restructuring charge.

The company said weak auto sales in the United States during the last two years have hurt all of its divisions, especially Wynn’s Climate Systems, its Texas air-conditioner unit.

Other Wynn’s divisions manufacture chemicals that are used by owners of both new and older cars, while the air-conditioner unit is largely dependent on new-car sales. The unit, acquired by Wynn’s in 1978, manufactures air-conditioning systems that are installed as original equipment by foreign and domestic car makers, as well as units sold by car dealers as after-market products.

At its peak in the late 1980s, the unit employed almost 1,000 workers. About half the subsidiary’s work force had been laid off by the time Wynn’s announced plans to restructure the unit in December. Fifty more workers were laid off by the end of 1991, said Seymour Schlosser, vice president for finance.

Wynn’s officials have said the business outlook for the Texas subsidiary looks poor for the next few years.

Wynn’s does not report sales for individual subsidiaries but said Climate System’s sales dropped 24% in the fourth quarter. It attributed the decline to lessening demand for air-conditioning units by customers such as Mazda and Chrysler.

The company said total sales for 1991 dropped 3.9% to $273.9 million from $285.1 million in 1990.

Wynn’s International Inc.

For 1991, Wynn’s International reported a loss of $11.2 million and a 3.9% decline in sales, to $273.9 million. The company attributed the loss to a one-time, $14.9-million restructuring charge in the fourth quarter.

Figures are in thousands, except per-share data.

4th Qtr 4th Qtr 12 Months 12 Months 1991 1990 1991 1990 Revenue $64,729 $72,407 $273,963 $285,123 Net income (loss) (14,016) 1,458 (11,200) 6,354 Per share (loss) (3.90) 0.38 (3.09) 1.65

Source: Wynn’s International Inc.